Some changes to Social Security happen automatically. For example, Cost of Living Adjustments are built into the program and result in retirees getting an automatic benefits increase in most years. Full retirement age has also been gradually moving later, so the age when new retirees can get full benefits has been increasing over time.  

Current and future retirees can plan for these changes because they are expected. But, with a new administration taking office, some aspects of  Social Security could change in unexpected ways in 2025. In fact, here are three potential modifications that you should watch for in the upcoming year.

1. More Social Security benefits for public service workers

One potential change to Social Security is almost guaranteed to happen. That’s because Congress recently voted to repeal two laws that have been on the books for around 40 years: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).

These laws reduce the Social Security benefits of people who work for both employers that pay into the Social Security system and employers that don’t collect Social Security tax and that provide a pension instead. This applies to many government workers, including police officers, firefighters, teachers, and employees of local government. 

Since both the House and Senate approved the legislation repealing the WEP and GPO, the only thing that’s left is for President Biden to sign the law — and then Social Security will implement the changes. 

2. Ending taxation of Social Security benefits

Another potential change could come down the pipeline, although it’s far from a sure thing.

When President Trump was on the campaign trail, he repeatedly vowed to eliminate taxes on Social Security benefits.  Currently, some retirees have to pay taxes on between 50% and 85% of their benefits, depending on income. Taxation of benefits kicks in when provisional income exceeds $25,000 as a single tax filer and $32,000 as a married joint filer, with provisional income equal to 1/2 of Social Security plus all taxable and some non-taxable income. 

Around half of retirees owe taxes on part of their benefits. They could all end up with more money in their bank accounts if President Trump follows through on this promise. However, there is concern this could make Social Security’s finances less stable in the long term as revenue collected from current retirees helps to fund the program. It’s unclear if there will be enough bipartisan support to make this happen as a result of the threat it poses. 

3. Modifications to shore up the program’s finances

Finally, there’s also a chance that lawmakers will finally decide to tackle the impending threat of Social Security running short of money.

As things stand the Social Security Trust Fund is expected to run out in 2035, which would mean benefits could be paid only from current revenue. The result would be that retirees would only get around 83% of promised benefits. 

Lawmakers are going to have to deal with this problem at some point. There’s no guarantee it will happen in Trump’s second term, and resolving the issue could be difficult as President Trump has vowed not to cut benefits. Some past proposals to shore up the program have included changing the way raises are calculated so benefits increase more slowly; moving full retirement age later; or imposing more  Social Security taxes on high earners without a corresponding increase in benefits.

Getting bipartisan support for any of these modifications is likely to be difficult, but the clock is ticking and with the Department of Government Efficiency aiming to reform various government programs, it’s possible the Trump Administration may decide to take on the challenge.

Social Security changes could affect both current and future retirees, so everyone should keep a close eye on any pending legislation coming in 2025 so they know what to expect for their future. 

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